Pharma news highlights: court cases, controversy and transparency

Ed Silverman shares his thoughts on some of the latest pharma news stories from the last four weeks, including court cases in South Korea and the US, as well as the increased efforts for data transparency by GSK.

(Continued from "Pharma news highlights: Gleevec, pay-to-delay, human gene patents and data analysis errors")

A new Johnson & Johnson manufacturing scandal – this one in South Korea – is worsening. Two weeks after the drugmaker was ordered to halt production of two types of Children's Tylenol syrup, because some bottles contained higher amounts of the active ingredient, regulators now plan to bring criminal charges against the Janssen unit there and ban production of five products over the next few months. And Janssen Korea unit CEO Kim Oak-Yeon may face three years behind bars.

The Ministry of Food and Drug Safety had already ordered Janssen Korea to recall and discard nearly 1.7 million Children's Tylenol bottles that were produced after May 2011, and now wants to hold the health care giant accountable for "producing and selling products that were a threat to public health". The excess amounts of acetaminophen can potentially cause liver damage.

The problems began when Janssen employees manually placed Tylenol syrup into bottles as new automated facilities installed in May 2011 could not completely fill the bottles toward the end of the manufacturing process. And despite being aware of the problem in March, it was a month before Janssen Korea notified regulators. During that period, the company sold about 38,000 bottles of Children's Tylenol Suspension 100ml and 500ml, though they potentially could cause liver damage.

Sanofi issued fine over smear campaign

Four years ago, Sanofi grew worried that a generic version of its best-selling Plavix bloodthinner would gain attention from physicians and pharmacies in France. So the drugmaker embarked on an aggressive effort to dissuade these folks from showing any interest in the forthcoming competition. Sanofi, however, appears to have gone a bit too far, at least according to the Competition Authority, which has just issued a $52.7 million fine for a smear campaign that essentially denigrated generics.

"...the Competition Authority has just issued a $52.7 million fine for a smear campaign that essentially denigrated generics."

Sanofi reps made remarks not only casting doubt on the safety and efficacy of generic forms of Plavix "without relying on any proven fact," but also raised questions about potential liability that physicians and pharmacies may encounter if patients developed medical problems after using a generic. The Competition Authority included comments from physicians and pharmacists, in fact, to illustrate the extent to which Sanofi (SNY) tried to convince them to stick with Plavix. The drugmaker "terrorized doctors" and "pharmacists cannot be fooled" by the tactics that were used, according to a translation.

The drugmaker, meanwhile, pushed its own generic version, which was called Clopidogrel Winthrop at the time and succeeded in establishing a market share of more than 34 percent in the generic clopidogrel market, a share of about four times greater than what Sanofi usually holds in the French generics market, according to the Competition Authority. And in 2008, France's national health system paid €625 million for the drug, which was the most spent on any pharmaceutical. By 2010, generic Plavix represented 65 percent of the target market, instead of the 75 percent expected.

Ranbaxy agrees to $500m penalty

Perhaps the most sensational news of the past month, however, was generated by Ranbaxy Laboratories, which agreed to a $500 million penalty to settle criminal and civil charges stemming from a long-running manufacturing failure and cover-up scheme.

The US Justice Department called this the largest "financial" penalty paid by a generic drugmaker for violating the Food, Drug & Cosmetic Act. Ranbaxy pleaded guilty to seven felony counts, including three for making false statements to the FDA; paid a $120 million criminal fine and forfeited $20 million. Another $350 million was paid for causing federal healthcare programs to overpay for various drugs.

The Indian generic drugmaker used raw chemicals from unapproved sources, fabricated in-house test data to meet FDA standards and concealed these activities from FDA inspectors by falsifying records. These infractions went on for several years, mostly at two plants in India, but also involved senior management there and in the US.

"...the most sensational news of the past month, however, was generated by Ranbaxy Laboratories, which agreed to a $500 million penalty..."

At one point, the FDA ordered an import ban on 30 different drugs, but not a recall of Ranbaxy medicines that were already circulating. A consent decree was eventually issued, but several months ago, Ranbaxy made headlines once again after recalling generic Lipitor was recalled after particles were found in some lots, embarrassing the FDA and the feds.
The case began nearly a decade ago by a former Ranbaxy executive, Dinesh Thakur, who hired private security after resigning but will receive $48 million, less attorney fees, for his trouble. Despite the severity and scope of the infractions, however, the settlement does not include any sort of penalties for individual Ranbaxy executives.

Morning-after pill controversy in US

One of the most contentious battles is playing out in the US over the Plan B morning after pills. The federal government is appealing a scathing ruling by a federal judge, who continues to lambast the Obama administration for purportedly placing politics over science in restricting access to teenage girls. US District Judge Edward Korman had ordered the FDA to make the pill available on an over-the-counter basis to girls of all ages.

In his recent order, Korman ruled the pill should be available without a prescription of point-of-sale restrictions within 30 days, and accused the White House of acting in "bad faith," causing "intolerable delays," engaging in "political interference," and allowing the FDA to exercise an "administrative agency filibuster."

The decade-long saga took a controversial turn in late 2011, when the White House blocked the FDA from allowing the pill to become more widely available prior to the most recent Presidential election, prompting charges the administration was trying to appease conservatives. Plan B prevents a fertilized egg from implanting in the womb and some equate this with abortion.
The administration claims Korman overstepped his authority because such an issue should be decided by agency rulemaking. The White House contends the only to amend distribution is for a manufacturer to submit the appropriate paperwork seeking to ease restrictions. Failing to do so, the feds argue, would harm the public interest, because the public relies on agency decisions, not court dictates.

"One of the most contentious battles is playing out in the US over the Plan B morning after pills."

The issue grew more complicated last month when the FDA approved the newer Plan B One-Step – which is just one pill, unlike the older version – for use for females who are 15 years and older without a prescription. Until then, the pill had been available without a prescription only to women who are 17 years and older. Teva had made an amended request shortly after the December 2011 rejection.

GSK ups transparency efforts

Finally, GlaxoSmithKline has created an online system for research to request access to patient-level clinical trial data and released the names of a group of experts who will review requests from outside researchers seeking to examine trial data. The move comes seven months after the drugmaker promised to create such a system and foster a sense of transparency.

Glaxo maintains the effort will make it possible for outside scientists to study Glaxo data and develop their own conclusions about safety and effectiveness. The move comes after years of controversy over the extent to which drugmakers clinical trial data and various scandals in which side effects were purportedly hidden from view.

The pharmaceutical industry has long been criticized for failing to fully make underlying patient-level data available to others who seek to verify results.Drugmakers have insisted the data is proprietary, but critics say the reluctance to disclose such information can be a red herring for hiding unflattering results that may limit sales.

About the author:

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for the past 16 years. In addition to editing Pharmalot, he is currently an editor-at-large for Med Ad News.

Previously, he was a bureau chief for The Pink Sheet, the venerable industry newsletter, and a contributor to its sister publication, In Vivo magazine. Before that, Silverman worked as a business writer for The Star-Ledger of New Jersey, one of the nation's largest daily newspapers, where he conceived and launched Pharmalot. During his 13-year tenure, he closely followed a variety of topics of concern to those who work for, and with, drug makers – drug development; mergers and acquisitions; regulatory oversight; safety and pricing controversies, and marketing issues.

Prior to joining The Star-Ledger, Silverman spent six years at New York Newsday and previously worked at Investor's Business Daily, among other newspapers. He has a master's degree in journalism from New York University and a bachelor's degree in accounting from Binghamton University. Tethered to his laptop and Blackberry, Silverman lives in suburban New Jersey with his wife, three children, a sizeable Labrador retriever and a sneaky beagle.

Should all pharma companies increase their transparency efforts?